One Size Doesn't Fit All

Not long ago, the friendly druggist on the corner knew just what you needed and what you wanted. He even knew when you were born and that you're allergic to penicillin.

Today, in a world of mass marketing and global competition, the druggist who knew his customers as well as his own children is out of style.

But customers increasingly are looking for this kind of personal service from carriers. Thanks to demographics and technology, carriers can deliver.

"We have 21/2 million customers," said Bryan Curran, U.S. Cellular director of marketing-information systems and programs. "We're trying to get back to that model of service where the local merchant gave the best products and services based on their knowledge of a customer's needs."

DEMOGRAPHICS OF OLD Carriers used to market one product to everyone in the same way and with the same message.

"In the past, companies, including BellSouth, blasted our message out to the marketplace," said Cristy Swink, BellSouth Mobility DSC director of marketing. "You were not hitting your target. With the increased number of competitors, everyone is moving away from that shotgun approach."

Swink said in today's marketplace, no carrier can afford to be all things to all people. If you understand and have access to demographic information, you can better serve your customers based on their needs. That represents a huge shift from the way carriers used to sell.

"We used to just spray it out there and hope that it stuck to someone," Swink said. "Now, we're making sure that when we have an offer, we are targeting the most appropriate group."

Curran said U.S. Cellular has seen the change, as well.

"Instead of going out with the same message to young, single people and retired people, (carriers) started trying to break their messages into logical groups," he said.

TARGETING TALKERS The idea is to divide customers into categories so you can speak to the needs and wants of each group. But using demographics to target today's customer segments is no easy task.

"Because wireless is moving from a business product to a consumer product, now companies must figure out: How do I segment the population? How do I target my messages? How do I figure out what's a value-added service for different segments of the population?" said Scott Hefter, PRTM management consultants communication administration group director.

Swink said BellSouth and other carriers have discovered that they can spend marketing dollars most effectively by using psychographic and demographic data, segmenting their targeted and base customers, and then using customized messages.

"We use that same information to help us target those customers because you can segment them into as many groups as you want, but if you don't know what makes them tick and how to target them, your work is for naught," she said.

BellSouth looks at its segments based on customer benefit because people can fall into the same demographic group yet not get the same benefit from a product or service.

"You really have to look at stages in life, which is a psychographic factor, and the benefits that the customer is going to get from using your product or service," Swink explained. The goal: Improved retention rates and increased revenue per subscriber.

"There's no need to throw dollars out there and not target segments," Swink said. "One company cannot treat me the same as (it does) my mother because our needs are different."

For a given segment, she said BellSouth considers the best medium and message to attract these customers and to relay what it offers to them. Curran said U.S. Cellular divides its customer pie into slices based on usage.

"We're concerned about the whys and whats of how you use it, and then we look at the demographics," he said.

U.S. Cellular applies demographics in its segmentation and combines that information with how customers use the phone. It also employs geodemographics, which combines where people live with demographic information. The theory is that your neighbors are more similar to you than different, Curran explained.

U.S. Cellular also uses demographic information for retail-site selection.

"We have sophisticated models to look at income groups, population, traffic flows, home ownership," he said. Using that information with models of successful stores, U.S. Cellular can look at areas where it doesn't have a store and determine how well a store would do there.

BRAVE NEW WORLD Demographics aren't really influencing carrier marketing and sales decisions now, Curran said. It's one source of information, but as wireless becomes more pervasive, changes in usage are driving both carrier and customer decisions.

The business user has been well targeted and heavily penetrated, and the group using phones for personal reasons cuts across all demographics groups. Curran said the fastest-growing demographic groups currently fall into three categories: slightly higher income, average income and slightly below-average income.

Teens are one target. Customer research revealed that this group has a high propensity to adapt to technology, so wireless carriers came up with a new product: prepaid.

But segmenting groups and targeting them with messages is rarely so clear-cut. Smart carriers also know that it's easier and cheaper to keep current customers happy than it is to attract an unproven new demographic group. The best plan is using demographics to establish and cultivate relationships with customers, just like the corner druggist. Ironically, carriers are using modern technology to return to the way people did business 100 years ago.

"We take advantage of every customer contact to help us build a better relationship with our customers," Swink said. "With people logging into your Web site and giving you information, there's just more ways to touch that customer. That is going to make more information about our customers more accessible to us."

U.S. Cellular has sold phones on-line since 1997, but it's now looking at making its Web site more powerful so it can collect more customer information.

"(The Internet) gives customers an opportunity to be served when and where they choose," Curran said. "If you tell me what you want to hear, when you want to hear it, and how you want to hear it, hopefully, you'll be more willing to listen to the message."

It's now possible to store tremendous quantities of information on computers. Before, a customer's name, address, account number and two or three other pieces of information were the max. Now you can store much more information to help build relationships.

"The more you know about a customer, the better you can serve that customer," Curran said. "If I know a lot about you and anticipate your needs, then I can come to you at the right time with an additional product."